Merck Acquires Verona Pharma for $10 Billion to Boost Respiratory Portfolio

Merck & Co. has announced a definitive agreement to acquire UK-based Verona Pharma for approximately $10 billion, aiming to enhance its respiratory treatment portfolio as it prepares for the 2028 patent expiration of its leading cancer drug, Keytruda.

Under the terms of the agreement, Merck will pay $107 per American Depository Share (ADS) of Verona Pharma, each representing eight ordinary shares. This offer represents a 23% premium over Verona's recent stock price. The transaction is expected to close in the fourth quarter of 2025, pending shareholder and court approvals.

Verona Pharma, founded in 2005 and headquartered in London, specializes in developing treatments for respiratory diseases. Its flagship product, Ohtuvayre (ensifentrine), is an inhaled medication approved by the U.S. Food and Drug Administration in June 2024 for the maintenance treatment of chronic obstructive pulmonary disease (COPD) in adults. Ohtuvayre combines bronchodilator and non-steroidal anti-inflammatory effects, offering a novel approach to COPD management. Since its launch in August 2024, Ohtuvayre has filled 25,000 prescriptions and is projected to generate up to $4 billion in annual sales by the mid-2030s.

Merck's acquisition of Verona Pharma is part of its broader strategy to diversify its portfolio ahead of the anticipated revenue decline from Keytruda's patent expiration in 2028. Keytruda, which generated nearly $30 billion in revenue in 2024, is expected to face biosimilar competition post-2028, potentially leading to a significant decrease in sales. By integrating Ohtuvayre into its portfolio, Merck aims to strengthen its position in the respiratory disease market and offset potential revenue losses.

This acquisition marks Merck's largest since its $10.8 billion purchase of Prometheus Biosciences in 2023, reflecting the company's ongoing efforts to strengthen its pipeline in anticipation of upcoming patent expirations. The pharmaceutical industry has seen a trend of significant mergers and acquisitions, with global pharmaceutical and biotech M&A deals totaling $105.3 billion in 2025, marking a 7% increase from the previous year.

The acquisition of Verona Pharma underscores Merck's commitment to addressing unmet medical needs in respiratory diseases and its proactive approach to navigating upcoming patent expirations. By integrating Ohtuvayre into its portfolio, Merck not only diversifies its offerings but also positions itself for sustained growth in the evolving pharmaceutical landscape.